Autotrophic nitrogen removal and its microbial community from a laboratory scale upflow anaerobic sludge bed reactor were characterized with dynamic behavior of nitrogen removal and sequencing result of molecular technique (DNA extraction, PCR and amplification of 16S rDNA), respectively. In the experiment treating inorganic wastewater, the anaerobic granular sludge from a full-scale UASB reactor treating industrial wastewater was inoculated as seed biomass. The operating results revealed that an addition of hydroxylamine would result in lithoautotrophic ammonium oxidation to nitrite/nitrate, and also hydrazine would play an important role for the success of sustainable nitrogen removal process. Total N and ammonium removal of 48% and 92% was observed, corresponding to nitrogen conversion of 0.023 g N/L-d. The reddish brown-colored granular sludge with a diameter of was observed at the lower part of sludge bed. The microbial characterization suggests that an anoxic ammonium oxidizer and an anoxic denitrifying autotrophic nitrifier contribute mainly to the nitrogen removal in the reactor. The results revealed the feasibility on development of high performance lithoautotrophic nitrogen removal process with its microbial granulation.